Dow Jones
Step Aside: Here Comes the Soil Carbon Market

Cropland and grassland in the
United States could potentially store enough carbon to offset 12 to 14 percent
of the carbon dioxide emitted from vehicle tailpipes and industrial smokestacks
in this country.

Thats the conclusion based on the first national estimate of how much
carbon these lands are storing or sequestering and how much more they could
store. Marlen D. Eve, a soil scientist with the
Agricultural Research Service in Fort
Collins, Colo., and colleagues developed the actual storage estimate for use in
international climate-change agreement discussions: 20 million tons of carbon a
year.

Eves colleagues--Ron Follett, John W. Kimble and Rattan Lal--have
calculated that improved management could boost that total to as much as 200
million tons. At $20 a ton, which is the price at which stored carbon credits
are projected to be sold for within a decade, this means the U.S. could
potentially store about $4 billion worth of carbon a year on the nations
farmlands and grasslands. Typical rates of carbon sequestration can be from
one-half up to a ton of carbon each year.

Carbon Boards of Trade are beginning to proliferate on the
Internet, including a global exchange that offers a low price of $2.35 to $2.50
for carbon in the United States. Even the Chicago Board of Trade is considering adding a
carbon exchange market.

All of this comes about as international agreements and domestic policies in
the U.S. and elsewhere make it likely that farmers will be paid in some way for
storing carbon in their soils. Farmers might sell credits for storing carbon,
just as pollution credits are currently traded. Or they might receive financial
assistance for using carbon-conserving practices. The pressure to reduce
emissions of greenhouse gases like carbon dioxide is driving the carbon
conservation payments movement.

You can read more about ARS carbon storage research in the February issue of
ARS' Agricultural Research
magazine.